According to conventional wisdom, climate mitigation by governmental regulation should target the reduction of greenhouse gas emissions. Indeed, corporations and industries, including their products and supply chains, are the main source of greenhouse gas emissions, which cause global warming and climate breakdown. However, in a recent paper, I argue that regulators suffer from a blind spot when it comes to climate change mitigation: corporate climate obstruction.

Climate obstruction by firms is a sophisticated, manipulative practice involving climate denial, climate washing, and other deceptive corporate behaviors that aim to impede, block, and delegitimize climate legislation and regulation. The end goal of climate obstruction is to help firms that rely on fossil fuels to keep doing business as usual and focus on their bottom line. In my paper, I argue that in addition to industrial emissions reduction, regulators should effectively respond to climate obstruction.

The article discusses climate denial as a regulation and reputation management technique that firms like oil and gas companies have used at least since the 1980s to frustrate climate policies. Importantly, corporate climate denial is not a typical business lobbying practice, but a vast de-legitimation campaign backed by fake science, fake experts, and false arguments, which puts thousands of lives in danger. Climate denial mechanisms target policymakers, investors, the public at large, the media, schoolchildren (via educational material), and consumers. Evidence suggests that climate denial strategies have been and still are implemented by firms despite their knowing that burning fossil fuel causes global warming. This misrepresentation strategy is in fact intentional and very similar to the denial strategies implemented by the tobacco industry in the 1950s.

As part of their climate denial strategies, companies are claiming that climate regulation initiatives are mere alarmism led by biased regulators, that climate change is not urgent – a delay tactic that is now gradually replacing the outright denial of climate change science – and that consumers, not firms, are responsible for the situation. I frame this type of corporate behavior as a critical meta-regulation problem that goes far beyond the conventional non-compliance dynamics in the business regulation world. While corporate non-compliance with law and regulation in various fields is nothing new, vast climate denial efforts aim to eliminate the legitimate basis and basic rationales for climate regulation altogether. By targeting various stakeholders in multiple arenas using the vast resources of major carbon emitters, climate denial became and is still a real threat to climate mitigation.

Another type of climate obstruction is climate washing, a new form of greenwashing that is gaining popularity among firms in and outside the oil and gas industry. For example, firms are now using ESG ratings to signal to stakeholders that they are climate friendly. However, ESG ratings are unregulated and often misleading and can be dangerous because they create a silencing effect. Unreliable ESG ratings, created by private ranking firms, as well as various misleading “net-zero” and other seemingly climate-friendly promises on product labels and companies’ websites and reports give a false impression of effective self-regulation. This misrepresentation may make policymakers and the public believe that strong climate regulation is not needed and that the market can effectively regulate itself. This is obviously not the case and government intervention is indeed needed to curb emissions.

In my article, I suggest that regulators adopt a shaming approach to expose direct and indirect corporate contributions to the climate crisis via emissions and climate obstruction tactics. For example, regulators can publicize rankings of firms according to their carbon-footprint, counteracting false ESG rankings with credible governmental information. This type of regulatory shaming could expose the gap between the climate statements of a firm and its actual climate practices. Special emphasis should be given in shaming publications to companies that use climate obstruction tactics to impede climate action and climate policies.

I further argue that regulatory climate shaming can effectively use the public’s response to negative information about corporate behavior that exacerbates the climate crisis and the vulnerability of a company’s reputation in that respect. The idea is that rankings, ratings, scores, emission databases, social media posts, climate labels, and other regulatory naming and shaming – as well as naming and faming – schemes will help nudge firms to act in a more climate-responsible manner. Relevant stakeholders in the shaming process may include employees, potential investors, shareholders, donors, customers, creditors, consumers, businesses, policymakers, the media, plaintiffs, and NGOs. Since climate law and regulation are falling far short worldwide, and since ordinary regulation is ill-equipped to handle meta-regulation problems like climate obstruction, regulatory shaming could become an important tool to fight climate change.

This post comes to us from Sharon Yadin, an associate professor of law and regulation at the Yezreel Valley College School of Public Policy and a research fellow at the University of Haifa Faculty of Law. It is based on her recent article, “Regulatory Shaming and the Problem of Corporate Climate Obstruction,” forthcoming in the Harvard Journal on Legislation and available here.